Regulator: Decades-Old Defect Caused ExxonMobil's Arkansas Oil Spill

WASHINGTON, Aug 1 (Reuters) - A leak in Exxon Mobil Corp's nearly 70-year-old Pegasus pipeline, which spilled thousands of barrels of crude oil in a small Arkansas town in March, appears to have been caused by an original manufacturing defect, U.S. regulators said on Thursday.

The 95,000-barrel-per-day pipeline, which has been shut since March after spilling about 5,000 barrels of Canadian crude in Mayflower, Arkansas, will remain shut until it can be restarted safely, a spokesman for the U.S. Pipeline and Hazardous Materials Safety Administration said.

The initial review of the ruptured pipeline, prepared by Hurst Metallurgical Research Laboratory, found the pipeline failure "resulted from an original manufacturing defect of the electronic resistance welded pipe," the spokesman said.

The 185-page review concluded it was "highly probable" some micro-cracking might have occurred immediately following the pipe's manufacturing, which likely led to further cracking and thinning of the pipeline during service, and ultimately causing the rupture.

The report did not give an opinion as to who was to blame for the failure.

When asked whether Exxon Mobil was responsible for the defect, company spokesman Aaron Stryk said the Youngstown Sheet and Tube Company, from Ohio, was the original maker and was no longer in business.

In 2009, Exxon completed a three-year project to reverse the Pegasus line to run north to south and increase its capacity by 50,000 bpd. The company did not increase the diameter of the line, but raised the pressure of it.

The review said Pegasus was running at above 700 PSIG, or gauge pressure, at the time of the spill.

The review is one part of PHMSA's ongoing investigation into the cause of the leak and the regulator, a branch of the Transportation Department, is working to finalize its understanding of the cause of the failure, the PHMSA spokesman said.

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